The need to look deeper on the gender gap

Abstract

The gender gap in retirement savings is not just about superannuation balances; a deeper analysis could help policymakers target those most in need.

In this new paper, The need to look deeper on the gender gap, Jackie Downham and Nick Wilkinson look at the Household Income and Labour Dynamics in Australia (HILDA) data which shows a disparity between couples and singles on projected retirement income.

While the gap in super balances is materially wider for males and females who are part of a couple (compared to single individuals) their combined median projected retirement income is 2% above the “comfortable” level cited by the ASFA Retirement Standard. In contrast, the median projected retirement income for single males is 15% below ASFA’s comfortable level while single females are 23% below ASFA’s comfortable level.

Given that over 70% of people are married/part of a couple, we believe it is important to consider how the superannuation gap and retirement adequacy is impacted by marital status.

While there is a 24% gap in superannuation balances between single females and single males, the projected retirement income for females is 9% lower than males. Based on superannuation balances alone, this gap would be wider but single females are expected to rely more heavily on the age pension. In both cases the level of projected retirement income for singles is generally inadequate, with only one in four single women and one in three single men expected to reach ASFA’s comfortable level of retirement income.

Given couples are generally more on track to reach a higher level of retirement income adequacy, this would suggest policy discussions should be tilted towards addressing the shortfall in retirement incomes for singles, particularly single women.